DETROIT, April 23 (Reuters) - General Motors posted a
smaller-than-expected quarterly profit on Thursday on weakness
in South America and Russia and a higher tax rate, sending
shares down 3.5 percent.

"Clearly the macro environment in South America, and it's
primarily Brazil, deteriorated versus even where we thought it
was going to be," Chief Financial Officer Chuck Stevens told
reporters at the company's Detroit headquarters.

He expects the region to be "reasonably challenged" through
the first half of the year, but said GM is targeting second-half
profits similar to the same period last year.

Stevens said the No. 1 U.S. automaker has cut jobs and will
reduce production shifts at plants in Brazil, generating about
$200 million in annual savings. GM lost $214 million in South
America in the first quarter.

Stevens affirmed the company's overall 2015 outlook for
improved profit and said it remained on track in 2016 to hit 10
percent profit margins in North America and return to
profitability in Europe.

GM Chief Executive Officer Mary Barra dismissed reports of a
possible merger, saying the company would focus on its own
operations. "We're not going to entertain anything that
distracts us from accomplishing that," she said.

Fiat Chrysler CEO Sergio Marchionne has shown an interest in
a deal with GM.
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